The BBC has grabbed the chance to lock in the licence fee as part of horse trading in the UK government’s round of cuts. But it has paid a heavy price. The fee will be locked in at today’s rate of £145.50 (E167) for six years; a real terms cut of over 15%.

It has also agreed to meet the £300 million annual costs of running the World Service, something it offered to avoid the Government making it pay the £556 million to fund free TV licences for the over-75s.  And in a first the BBC has caved in on providing funds for another broadcaster and pay for S4C the Welsh language service from 2015.

It will also provide upto £150m for the provision of fast broadband to rural areas and £25m for the development of local TV content.

The extra costs to the BBC will amount to around £350m a year in aggregate and will affect TV, radio and online services. Evenso the BBC is said to be happy with the deal as it secures its publically funded future for the time being and it had feared Government ‘revenge’ for what it saw as profligate spending on management.

Full details will be announced as part of the Goverment statements on all the public spending cuts made later today.

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